Chaper 13-simplified.pptVIP

Ⅰ. Exchange rates and international transition c. Two changes in exchange rate ⅱ. Exchange rate and international transaction a. Domestic and foreign prices (＄ 1.50 /￡) × (￡50)= ＄75 (＄ 1.25 /￡) × (￡50)= ＄62.50 (＄ 1.75 /￡) × (￡50)= ＄87.50 Depreciation of home country’s currency makes home goods cheaper for foreigners and foreign goods more expensive for domestic residents. Appreciation of home country’s currency makes home goods more expensive for foreigners and foreign goods cheaper for domestic residents. ⅱ. Interest rate, e